On March 15, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a stay of the Securities and Exchange Commission’s new climate-disclosure rules, which were adopted March 6. The three-judge panel granted the requests for injunctive relief brought by seven companies, trade associations and three states, which asserted that being required to comply with the rules would result in irreparable harm. The panel did not elaborate on the rationale behind its decision. For a summary of the climate-disclosure rules and other legal challenges the rule faces, see our Securities Advisory: SEC Adopts New Rules for Climate-Related Disclosures; Lawsuits Challenge New Rules. The stay is temporary pending further judicial review.

To date, litigation challenging the rules has been filed in four federal courts of appeal, including the U.S. Court of Appeals for the Fifth, Sixth, Eighth, and Eleventh Circuits. KMK will continue to monitor the litigation and any guidance issued by the SEC with respect to the rule’s implementation.